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Norway surprises markets with interest rate cut


economy

Norway surprises markets with interest rate cut

Norway’s central bank has cut its main interest rate and hinted at possible negative rates ahead to support a weakening economy.

The Norwegian crown slid three percent against the euro and slumped to a 13-year low against the dollar as markets were taken aback.

Most economists surveyed in one poll had expected the main interest rate to remain at one percent.

The bank’s reserve rate has been set to minus 0.25 percent for the first time.

The oil and gas sector, worth a fifth of Norway’s economy, has been suffering cuts in investment and thousands of job losses.

The central bank has been caught between the need to boost the sluggish economy, and the need to control a overheating property market.

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